PETALING JAYA (Feb 3): Rising interest rates in the US have sparked concerns that it will impact the rest of the world including Malaysia’s property sector.
The US stance on interest rates will have down-the-line implications on the property markets in other countries, including the property market and real estate investment trusts in Malaysia, said Khong & Jaafar Sdn Bhd managing director Elvin Fernandez.
The US Federal Reserve had increased the interest rate in the Decembers of 2015 and 2016. “This time they are suggesting that for 2017, there could be two or three rate hikes and this is also possibly because the new administration of the US is pushing for a more aggressive fiscal policy and there are implications to interest rates rising when fiscal policy is relied on more heavily,” said Fernandez.
Hence, the theme for the 10th Malaysian Property Summit this year would be “Property as it moves into an era of possible rising global interest rates”.
The annual summit is organised by The Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS). It will be held on Feb 23 at Sime Darby Convention Centre, Kuala Lumpur.
Speakers at the summit will be sharing insights on the Malaysian property industry in order to uphold its long-term sustainability and efficiency, said Fernandez who is the summit’s organising chairman.
“The speakers for this summit are practising valuers and real estate professionals and, as such, they will be bringing their deep understanding of the property market in their presentations,” he said, adding that PEPS is aiming to have as many as 500 attendees this year.
The speakers include the Finance Ministry’s Valuation and Property Services Department director general Dr Rahah Ismail, Kenanga Investment Bank Bhd head of equity research Sarah Lim, Knight Frank Malaysia Sdn Bhd executive director Teh Young Khean, Savills (Malaysia) Sdn Bhd executive director Allan Soo, past president of Real Estate and Housing Developers’ Association (Rehda) Datuk Ng Seing Liong, Raine & Horne International Zaki + Partners Sdn Bhd senior partner Michael Geh, Landserve (Johor) Sdn Bhd executive director Wee Soon Chit, Rahim & Co International Sdn Bhd research and strategic planning director Sulaiman Akhmady Mohd Saheh and Taylor Hobbs principal consultant Liaw Lam Thye.
Topics include an update and outlook of the residential market, retail market, Klang Valley office market, and property markets in the northern, southern and eastern economic regions as well as Sabah and Sarawak.
“We have in fact taken extra pains to get the speakers to go into some substantial depth, insofar as the fundamentals affecting each of the sectors are concerned,” said Fernandez.
As the local property market will continue to be challenging this year, with negative internal and external factors haunting the industry, industry players should look for innovative approaches.
One particular segment of the summit, which is a talk by Rehda past president Ng, will be dealing with how cost can be reduced in order for property prices to be brought down to more palatable levels in the medium to long term.
With the aid of discounted cash flow (DCF) models, the objective can be accomplished, said Ng.
“A properly constructed DCF model can show this clearly and this is what we intend to do for the coming summit,” he said.
However, it still boils down to a concerted move by all stakeholders towards lowering compliance cost to the bare minimum and moving towards the greater use of IBS (Industrialised Building System), he noted.
For more details on the summit, go to www.peps.org.my.
TheEdgeProperty.com is giving readers a chance to win a ticket worth RM1,088 to the summit. Go to www.TheEdgeProperty.com to find out how.
This story first appeared in TheEdgeProperty.com pullout on Feb 3, 2017, which comes with The Edge Financial Daily every Friday. Download TheEdgeProperty.com pullout here for free.